Steven J. Baum’s New York foreclosure law firm has attracted lawsuits and fines for its actions during the housing crisis, with one judge likening its conduct to something out of the “Twilight Zone.”

As recently as last month, Baum’s firm, which one lawyer for homeowners said processes about half the foreclosures in New York state, was ordered to pay $14,532.50 in legal fees and costs and a $5,000 fine by Nassau County District Court Judge Scott Fairgrieve in Hempstead, New York.

The judge said that when Paul Raia refused to vacate a Garden City co-op after foreclosure, Baum’s firm filed an eviction petition that misidentified the lender.

“Falsities were contained in five paragraphs out of only ten paragraphs in the entire petition,” Fairgrieve wrote in his Nov. 23 decision.

All 50 U.S. state attorneys general are investigating whether banks, loan servicers and law firms properly prepared documents to justify hundreds of thousands of foreclosures. The probe came after JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures and Bank of America Corp. froze foreclosures nationwide.

Steven J. Baum PC, located in Amherst, New York, just north of Buffalo, has been accused of overcharging, filing false documents and representing parties on both sides of a mortgage transfer. Baum runs the firm his father founded in 1972, according to a fact-sheet provided by Earl V. Wells III, his spokesman.

Syracuse Grad

Baum is a graduate of Syracuse University, got his law degree from the State University of New York at Buffalo and was admitted to practice law in 1987, according to Martindale.com, a legal directory. Baum answered some questions via e-mails.

“Consumer activists and attorneys representing homeowners have their own agenda in this process, including degrading the legal work we conduct on behalf of our clients by using terms like ‘foreclosure mill’ which I find personally and professionally insulting,” he wrote.

At a continuing-education training session a couple of years ago, “Steven Baum himself said they did 49 percent of foreclosures” in the state, Rebecca Case-Grammatico, staff attorney at Rochester, New York-based Empire Justice Center, which represents poor people in foreclosures, said in a phone interview. A complaint in one lawsuit against Baum’s firm says it is “believed to be the largest foreclosure mill in the State of New York.”

Baum declined to comment on the size of his business.

Pillar Processing

A company that processes foreclosure documents shares an address with his law firm. That company, Pillar Processing LLC, is owned by Manhattan private-equity firm Tailwind Capital LLC, according to its website. Brooke Gordon, spokeswoman for Tailwind Capital, declined to comment.

“He’s opposing counsel for us on a huge percentage of our cases,” Meghan Faux, project director of the Foreclosure Prevention Project at South Brooklyn Legal Services, who represents homeowners in predatory-lending cases, said in a phone interview.

New York State Supreme Court Justice Arthur M. Schack in Brooklyn called the firm’s explanations in one case “so incredible, outrageous, ludicrous and disingenuous that they should have been authored by the late Rod Serling.”

Schack threw out the case in part because he said the assignment of the loan had been done improperly. The assignment was made by a Baum lawyer on behalf of Mortgage Electronic Registration Systems Inc. as the nominee for the mortgage bank, according to the judge’s opinion. The same day, the Baum firm represented the buyer of the loan by filing the foreclosure action, the judge said. Schack said it was a conflict for the firm to represent both sides.

‘Parallel Mortgage Universe’

“Steven J. Baum PC appears to be operating in a parallel mortgage universe, unrelated to the real universe,” the judge wrote in that May decision. “Next stop, the Twilight Zone,” he said, quoting from Serling’s TV series about science fiction and the supernatural.

On January 5, 2010, Wells Fargo Home Mortgage, Inc. (“Wells Fargo”) was the successful bidder at the foreclosure sale of the subject premises known as 360 Stewart Avenue, Unit 1E, Garden City, New York. Wells Fargo received 220 shares of Stewart Franklin Owners Corp., as well as the proprietary lease previously owned by the Respondent, Paul Raia.

On March 12, 2010, Wells Fargo purportedly assigned its January 5, 2010 bid to Petitioner Federal Home Loan Mortgage Corp. (“FHLMC”). However, the “Assignment of Bid” contains only the signature of Steven J. Baum, P.C., and there is no indication for which party the signature was made. Mr. Baum’s office claimed to have the authority to execute the document on behalf of FHLMC by way of a power of attorney attached to the petition. Baum’s office also claimed to have the same authority for Wells Fargo, although Baum’s office provides no evidence in support of that allegation.

EXCERPTS:

Baum has recently faced numerous standing issues concerning assignment, for which its cases were dismissed.

The opinion continues on to state that the “court’s inherent power to impose sanctions is particularly appropriate where fraud, deception, and misrepresentation has been practiced upon the Court.

The fraud perpetrated on the court here occurred when petitioner’s attorney swore that the petition had been read and that the contents of the petition were true to the deponent’s own knowledge. Sanctions may attach to attempts to deceive the court.

CONCLUSION

In view of the foregoing, Steven J. Baum, P.C. must compensate Volunteer Lawyers Project in the amount of $14,532.50 for reasonable attorney’s fees and disbursements within 30 days of the date of this order. Further, this court imposes monetary sanctions in the amount of $5,000.00 on Steven J. Baum, P.C. payable to “Lawyers’ Fund for Client Protection,” established pursuant to section 97-t of the State Finance Law, within 30 days of the date of this order. The clerk of the court is directed to give notice, pursuant to 130-1.3, to the Lawyers’ Fund for Client Protection concerning this award of sanctions.

The court held that it “will hold a hearing to determine what sanctions if any, that may be imposed upon Steven J. Baum, P.C. for the false representations made in the petition,” as counsel for Federal Home Loan Mortgage Corp.